# Expected Value question.

Okay say a person just graduates from Mid Level University with GPA around 3.8 to 3.9. No restraint on his location. what is his expected Salary in say 5years if he decides to pursue a career in Finance. And takes the CFA. Assuming that he’ll pass all his test in 4 years because he’s addicted to AF. using discrete rv formula: for example, this is just an example… use whatever you want as probabilities etc. E(X)= Prob(finding FO Job)*(Salary+Bonus)+Prob(MO Job)*(Salary Bonus)+ Prob(not finding a job)*(BO salary+Bonus) + … I don’t know if this is a stupid question. But i figured i might as well ask it, because it’s been on the back of my mind for the longest time.

That’s easy, \$565,000 per annum.

xck2000 Wrote: ------------------------------------------------------- > I don’t know if this is a stupid question. I do.

Ah Joe, don’t take your stress from the CFTC call out on the kid.

Thanks Turk, Joey, man thanks for kicking me in the balls. I respect and appreciate all the help you give to people on the boards here. But for the first thread i create, you have to give me a smart ass answer. Okay fair enough, it’s a stupid question. But could you at least explain to me, why it’s a stupid question. I’m on the brink of giving up on doing the CFA, and this isn’t helping. But then again, i’m sure you could probably care less if another one bites the dust. and neither would anybody else. Helps make the CFA get the ratio of drop outs vs. success rates going well.

I get \$522, 633 per annum? Did you forget to carry the 3?

“I get \$522, 633 per annum? Did you forget to carry the 3?” Happens every time.

Besdies the fact that it is kind of a dumb question, because there are some many variables, and there is no readily available data for the corresponding propbabilities, my gut feeling is about \$110K. Look at some of the threads where people posted their comp. Mots people in finance don’t make a hell of a lot, even if they have the high GPAs, unless they come from a top school, or one close to a major money center, or have a connection, or have an MBA, etc.

Don’t forget… Over the next couple of years minimum wage will be going up to \$7-8. That will increase the salary of all those analysts working 70 hours per week.

Turkish Wrote: ------------------------------------------------------- > That’s easy, \$565,000 per annum. Perhaps 565 Honkers??

Thanks Super I. Yea sorry it really was a stupid question. But i appreciate your answer. It was exactly what i was looking for. I have looked at the salaries of people posting on the forums, but it’s hard to estimate how many have those 565,633 honker jobs. compare to those that bottom level jobs. And to be clear, i never expected an exact estimate or even close to one. I was more interested the distribution of salaries out there and how small of a percent of people have it. And i’m not the first person to ask for estimate on something that have infinite amount of variables to it. Im sure you can understand that when you look at all those multivariate regression, such as stuff like the fama french formula but it’s good to know that Turkish thinks that i’ll have a probability of 100% of getting his salary if i pass these CFA exams.

xck2000 Wrote: ------------------------------------------------------- > Thanks Turk, > > Joey, > man thanks for kicking me in the balls. C’mon that was hardly a kick in the balls or if it was then that should go in the equation. I don’t think that there are an awful lot of covariates for how much money you make except years of experience. I don’t even think that CFA improves salaries particularly much. If you want to make money on Wall St: 1) Get as close to as much money as you can. If you are dealing with \$100,000 investments and someone offers you a job with \$1M investments, you should take it. 2) Work on acquiring options which people will give you much more easily than straight fees. Hedge fund incentive fees, greenshoe options, performance bonus instead of salary, etc… 3) Balance your career growth with performing your career functions. Sometimes playing golf with the boss is more important than writing great software. 4) Avoid burnout. People in finance work harder than people are capable of working for a long time. You need to figure out ways of getting rid of stress that are healthy. 5) Recognize that you are in a competitive situation with nearly everyone. Find allies but don’t let anyone know they aren’t your ally. 6) Make sure your personal life can’t take you down. Great careers disappear over substance abuse and divorce (probably among others). 7) Manage your emotions on the job. Don’t get angry or sad. Don’t yell or cry no matter how stressful it gets. Be very thick-skinned.

JoeyDVivre Wrote: ------------------------------------------------------- > xck2000 Wrote: > -------------------------------------------------- > ----- > > Thanks Turk, > > > > Joey, > > man thanks for kicking me in the balls. > > C’mon that was hardly a kick in the balls or if it > was then that should go in the equation. I don’t > think that there are an awful lot of covariates > for how much money you make except years of > experience. I don’t even think that CFA improves > salaries particularly much. If you want to make > money on Wall St: > > 1) Get as close to as much money as you can. If > you are dealing with \$100,000 investments and > someone offers you a job with \$1M investments, you > should take it. > 2) Work on acquiring options which people will > give you much more easily than straight fees. > Hedge fund incentive fees, greenshoe options, > performance bonus instead of salary, etc… > 3) Balance your career growth with performing your > career functions. Sometimes playing golf with the > boss is more important than writing great > software. > 4) Avoid burnout. People in finance work harder > than people are capable of working for a long > time. You need to figure out ways of getting rid > of stress that are healthy. > 5) Recognize that you are in a competitive > situation with nearly everyone. Find allies but > don’t let anyone know they aren’t your ally. > 6) Make sure your personal life can’t take you > down. Great careers disappear over substance > abuse and divorce (probably among others). > 7) Manage your emotions on the job. Don’t get > angry or sad. Don’t yell or cry no matter how > stressful it gets. Be very thick-skinned. Joey, I think you and Willy can now officially start up a career coaching/recuriting comany as a side venture! Good advice

Wow, Joey! I expected to be berated again for whining but you replied with kindness and very insightful advice. Thank you! Sorry, it was just a small shock that 10minutes right after i posted a stupid question, i get slammed by 2 people for being stupid. thanks for the replies, now hopefully this thread dies off to bury my retarded question under a pile of other threads.